Feb 15, 2019 - 08:08 AM
Master tester, Perry Belcher: https://twitter.com/perrybelcher?lang=en
This is an interesting question. Perry Belcher (famed internet marketer) did a test on this a few years ago. They set up a split test as follows:
Page 1: Allow PayPal and credit cards
Page 2: Only allow credit cards
The conversion rate was about the same for both pages. When PayPal wasn't an option, customers gladly paid with their credit cards. Most people have at least one credit card.
And as you note, the PayPal transactions were less profitable for them and so Page 2 won.
Interestingly, according to Perry, those who paid with PayPal cancelled subscriptions and sought refunds at a higher rate.
In my experience these type of tests are very subjective and highly dependent on factors like your audience, the offer, the look and feel of the site, the dollar value of the purchase and so on.
I'd encourage you to do a similar independent test on your site. If you have enough traffic maybe do 10% and 10% with the rest going to the current control.
Another thought (suggested by someone on Reddit) is to stop worrying about the PayPal fees for now and instead strive to do the higher sales volumes that get you into the low fee tiers. I don't know what your current volume is but if you are within striking distance this could be an option.
To answer your original question, if you really just want to discourage PayPal's use but still offer it as an option, you can make the logo smaller of have 'fine print' that states you offer it.
You could also offer some 'free report' with a high perceived value to those who use payment options other than PayPal. Not sure if this is frowned upon or illegal. But if merchants can offer better terms for cash buyers, why not do the same for those who don't use PayPal?
Feb 17, 2019 - 01:56 AM
One big reason users like and prefer Paypal is that it often saves them from having to enter their shipping address.
So, if you intend to offer Paypal as an option at all, the question boils down to usability: how do you make the checkout experience on your website as easy for your users via credit card, as it is via Paypal.
Unfortunately, having a (likely valid) shipping address on file is a *very* powerful thing for Paypal to have, and offering Paypal tends to increase conversion rates. If this is not true for you, then the potentially obvious answer would be "don't offer paypal".
If you are going to offer Paypal, then the one option I've seen is zooming out and looking at the long-term value of your customer. Is having your customer signed up with an account worth giving him/her a $5 credit towards future purchases? That's one way to "outrace" the convenience factor that Paypal offers.
But then, that individual transaction is even less profitable for you, and you'd need to have some confidence that the user would turn into a repeat customer.
Feb 18, 2019 - 12:04 PM
Jasper and the anonymous user covered your options pretty well I feel.
The question I have is this: why can't you just do a test where you eliminate it or hide it as an option?
In the not-for-profit space, I've seen paypal have a detrimental effect... meaning... people gave LESS because it was there (verified at high confidence levels). My hypothesis is that it had a lot to do with the user experience... leaving the site... multiple clicks...
Sure... for people that use paypal all the time, they like it. But if you've tried some of the other suggestions above, I suggest a test where you hide the option entirely and see if there is a negative relative difference in sales or average order volume. Use statistical hypothesis testing also... don't just eyeball it after a few days. You want enough data so that you only have a 1 in 20 chance of being wrong (95% confidence)
See if you can test it.